US factory output close to six-year high

American factories recorded their best month's trading in almost six years in
March as the manufacturing sector returned to much-needed form on the back
of the nascent global economic recovery.

By James Quinn, US Business Editor

8:53PM BST 01 Apr 2010

The Institute for Supply Management's factory index for March saw manufacturing expand at the fastest rate since July 2004. The index, in which readings above 50 show expansion, rose to 59.6 last month from 56.5 a month earlier. The rise came in part from companies restocking inventories following a lean period through the recession, and in part because of increased demand.

Brian Bethune, IHS Global Insight's chief US financial economist, said the report indicated that "the production recovery continues to move ahead at a very good pace, underpinned by solid advances in productivity." However Jan Hatzius, of Goldman Sachs, noted that although manufacturing was strong, the construction industry was much weaker.

Elsewhere in the economy, Challenger, Gray & Christmas's monthly survey of labour market losses recorded a drop of 67,611 private sector jobs in March, at odds with today's government non-farm payroll numbers, which are expected to show a rise of 190,000 jobs.